SARS Wars: Massive data leak alleges British American Tobacco SA’s role in bribery and corruption

By Marianne Thamm• 16 August 2016

Craig Williamson, one of apartheid’s most ruthless spies and assassins, is one of many “agents” named in a massive data leak posted on a Twitter account, @EspionageSA, and which points to wide-scale industrial espionage, fraud, racketeering, corruption and bribery by agents representing and working on behalf of British American Tobacco SA (BATSA). While the allegations are not new, the explosive documents reveal how members of SAPS, the State Security Agency, the Hawks and SARS were drawn into BATSA’s attempts to eliminate competition in South Africa. These actions ultimately led to the destabilisation of SARS and the purging of its top executive structure in 2014. By MARIANNE THAMM.

The anonymous holder of the Twitter account SATobacco Espionage @EspionageSA signed up on 4 August, describing the account’s intention to “expose Industrial Espionage Money Laundering in Tobacco Industry by Corporate Company British American Tobacco”. The account’s first post referenced a WikiSpooks entry on notorious apartheid assassin, Craig Williamson, described by @EspionageSA as “Handler to the Dis-grunted [sic] Ex Employee of FSS (Forensic Security Services) Francois van Der Westhuizen”.

Today Williamson describes himself on his LinkedIn profile as an “Independent Tobacco Professional”. Williamson – who, among many other atrocities, orchestrated the murder of academic and activist Ruth First, sending her a parcel bomb in Maputo in 1982, and who sent a letter bomb which killed trade unionist Jeanette Schoon and her daughter Katryn in northern Angola in 1984 – was granted amnesty by the Truth and Reconciliation Commission.

In 2008 he was sequestrated following a civil case by the Schoon family. Williamson was an original silent partner in CTC Pty Ltd, trading as Carnilinx, but later branched out on his own. As he has been declared insolvent in South Africa, Williamson currently works from Botswana where he owns that country’s only cigarette manufacturer, Benson Craig.

By Sunday evening @EspionageSA had posted hundreds of files, videos, photographs, PowerPoint presentations, lists of undercover agents, reports, records of payments, affidavits and internal documents belonging to the Fair-Trade Independent Tobacco Association. Whistle-blower Van der Westhuizen’s identity had been kept secret until the Twitter posting on 8 August titled “THE Affidavit” and which linked to a Google Drive folder owned by “Black Widow”.

Van Der Westhuizen’s statement had been deposed in Johannesburg to the Competition Commission in December 2015 as part of Carnilinx’s complaint against British American Tobacco Holdings South Africa, British American Tobacco South Africa, Forensic Security Services (Pty) Ltd and its boss Stephen Botha, an apartheid era intelligence spy, as well as six others.

Allegations of widespread corruption and fraud in the tobacco industry are not new. Investigations by the amaBhungane Centre for Investigative Journalism have revealed, from at least 2010, that multinational tobacco agencies have spent millions paying State Security agents to protect their commercial interests. It has been a story fraught with subterfuge and deception with double and triple agents all employed and deployed to protect massive tobacco profits. Many of these operatives are former apartheid spies, spooks and cops.

The involvement of undercover agents, however, made sensational national headlines only in 2014 when Pretoria lawyer and triple agent, Belinda Walter, lobbed the first grenade at SARS, helping to create and shape a narrative about a “rogue unit” at the revenue service and that ultimately saw the SARS top executive structure – which had been investigating tax evasion in the tobacco industry – totally decimated. Those axed included Deputy Commissioner Ivan Pillay, group executive Johann van Loggerenberg and spokesman Adrian Lackay.

It was a spurious and still untested narrative, picked up by theSunday Times, and which prompted the purge by the new SARS Commissioner, Tom Moyane.

In an affidavit deposed by Walter in 2014 in a matter involving Carnilinx, the attorney said she had been introduced to BAT through her handlers at South Africa’s State Security Agency. She had agreed to spy for the tobacco multinational while acting as an agent for the SSA. Over and above this, Walter acted as legal adviser to BAT’s competition Carnilinx and also was the chairwoman of the Fair-Trade Independent Tobacco Association (FITA).

Walter and Van Loggerenberg, who headed the SARS National Research Group, embarked on a relationship which ended acrimoniously. Walter then lodged a complaint against Van Loggerenberg who resigned in February 2015 acknowledging that he had “erred in personal judgement concerning a matter in my private life… I believe I need to take responsibility and accountability for this”.

According to an affidavit seen by Daily Maverick, Walters earned £3,000 a month totalling £30,500 (just over half a million rand) in payments from BAT. In a confidential letter to Walter dated March 2014, BAT admits to paying her in cash or loading money on to two Travelex cards registered to a BAT employee in the UK. Walter was able to draw cash from ATMs in South Africa.

Van Der Westhuizen’s affidavit sets out how he was approached and recruited by Forensic Services Security (Pty) Ltd (FSS) in 2012. FSS was the Tobacco Institute of South Africas (TISA’s) private investigative arm and was funded by BAT to the tune of R150-million a year.

Through TISA, BAT and FSS representatives sat on a multi-agency Illicit Tobacco Task Team, which also included officials from the Hawks, Crime Intelligence, the State Security Agency and the NPA but not SARS. Criticism of the ITT is that BAT and FSS officials drove the law enforcement agenda.

Van der Westhuizen, an ex-cop and investigator for the Road Accident Fund, said he had been told that he would be required to conduct investigations for Unilever.

“On the first day of work I was told I would be investigating illicit cigarette manufacture on behalf of British American Tobacco South Africa (Pty) Ltd (BATSA). I discovered that Unilever is not and never was a client of FSS. I was employed as Project Team Manager, overseeing several investigations and was responsible for the conduct of several investigators,” said Van der Westhuizen.

These investigators were referred to as “handlers” he says, and his “primary work description from the very beginning was to spy on competitors such as Carnilinx, obtain confidential information through the employment of various contacts within the South African Revenue Services and the South African Police Services”.

Later he says, “Having now realised that my employment with FSS and BATSA was plagued with unlawful conduct, I decided to resign from the employ of FSS and BATSA and convey the facts of my employment to relevant parties. At all times I was told by FSS that the objective of my employment was to stop illicit trading of cigarettes which was invariably linked to criminal syndicates. I was told that the law sanctioned all of my investigations, interceptions of communications and breaches of rights to privacy of the various persons because we worked within the law with law enforcement agents.

“I have now discovered that the entire basis of my employment was premised on fraud; there was no proof of any illicit cigarette trading; there was no valid or lawful basis upon which the privacy of BATSA competitors could justifiably be breached. In hindsight, the purpose of my employment was for BATSA to deploy my investigative skill together with back-up from corrupt SAPS and SARS officials in order to disrupt the business of BATSA’s competitors, Carnilinx being one of them.”

He continues that it was “legally and morally wrong for me to work for FSS. I was misled though. I now find myself in a compelling position, as an upstanding citizen, to expose the high-handed and unlawful conduct of BATSA and FSS”.

FSS and BATSA, he says, embarked on a systematic campaign of harassment and disruption of Carnilinx’s business. The investigator says he had been told that “the only way for BATSA to successfully suppress competitors such as Carnilinx would be to employ a strategy of falsely suggesting that the competitors (including Carnilinx) are selling and marketing their cigarettes unlawfully”.

“The ultimate plan was to squeeze Carnilinx out of the market. And if that was not possible to prohibit its growth in order to guard the almost near monopoly market share of BATSA.”

He said officials from the Johannesburg Metropolitan Police Department, SAPS and SARS had been part of a collective strategy employed against Carnilinx.

“FSS was never able to show trading in illicit cigarettes by either nonpayment of customs and excise duty on the part of Carnilinx or dealing in counterfeit goods by Carnilinx customers.”

He adds that the FSS Project Management Plan – aimed at cutting the illicit trade and/or low price methodology used by Carnilinx to 51% of what was was being distributed – included SAPS, the Hawks, Crime Intelligence, the Asset Forfeiture Unit, SARS, Customs and Traffic Control Policing Unit.

BATSA is identified as the “client” who “has the authority to make decisions and may provide funding/finance” as well as having “the potential to overcome political and socio-economic obstacles that might have a direct influence of certain aspects of the project management goals”.

This, says Van der Westhuizen, is a reference to “the political connections which members and directors of BATSA have cemented within the senior members of the South African Law enforcement circles”.

The allegations of BAT illicit behaviour in South Africa follow claims of bribery that have been passed on to the UK’s Serious Fraud Office by Paul Hopkins, a BAT whistle-blower who worked in Africa for BAT for 13 years. Hopkins, who was responsible for halting the illicit tobacco trade in east and central Africa, admitted he had facilitated payments on BAT’s account to cripple anti-smoking laws in several east African countries, had made payments to officials to undermine efforts by the World Health Organisation to reduce deaths from smoking, ran a corporate spying operation, and had conducted “black ops” to put rivals out of business. In 2014 BAT declared an operating income of £4,546-billion.

These claims led to members of the US Congress calling for a Department of Justice investigation.

Van Loggerenberg, who has extensive knowledge of the tobacco industry, told Daily Maverick that he was aware of the Twitter account and had studied most of the documents released.

“Virtually nothing surprises me. I can confirm that I have been aware of most of these allegations since late 2013. It had always been my contention that, at least initially, the attacks on SARS, the High-risk Investigations unit and me, were driven by persons associated with the tobacco industry because we had exposed much of what is now being aired publicly. Without going into detail, I make specific reference here to particular state officials that were part of the so-called Tobacco Task Team, private tobacco manufacturers, private investigators and informants shared among them,” said Van Loggerenberg.

He said why the four probes at SARS – Khanyane, Sikhakane, Kroon and KPMG – had never considered “what I had put to them in this regard as relevant to their outcomes is something I cannot answer to”.

Incidentally, KPMG, which conducted an “investigation” into allegations of the SARS “rogue unit”, acts as auditors for BAT. The firm did not disclose this when it was contracted by Tom Moyane to conduct the probe. KPMG also omits to name BAT in its SARS report which has still not been made public, 8 months after its completion.

The SARS “rogue unit” saga has seen the Hawks under Major-General Mthandazo Ntlemeza hound Minister of Finance, Pravin Gordhan, who was SARS Commissioner when the unit was legitimately established and signed off. This included threatening to arrest and charge the Minister of Finance in relation to allegations of the “rogue unit” as well as demanding he reply to 27 questions hand-delivered a few days before Gordhan was due to give his budget speech.

The Hawks did not respond to Daily Maverick’s questions with regard to the revelations on the Twitter account or whether any of the individuals named are being investigated or faced arrest.

Van Loggerenberg, however, said he commended the person or persons who had set up the Twitter account and for bringing “some of these aspects” into the public domain.

“I implore the Hawks, SARS, SAPS Crime Intelligence, NPA and SSA to investigate those parts which clearly implicate some of their officials (current and former) in possible acts of corruption, money-laundering, fraud, advancing the interests of commercial enterprises, concealing such offences and compounding. If the type of ‘complaint’ lodged at SARS on 28 May 2014 can justify 4 ‘probes’ that must have cost the taxpayer millions, and a Hawks investigation, then I would imagine these revelations would surely require of these agencies to act decisive with what has now been released in the public domain,” he said.

In response to a query by Daily Maverick, BATSA issued an unsigned statement which reads:

“The illicit tobacco trade in South Africa, which accounts for nearly a quarter of the overall market, is a growing problem for our consumers and our business. For several years, we have endeavoured to assist the law enforcement agencies in their efforts to combat this illicit trade. Whilst we have a clear interest in combating the illicit trade and exposing the organisations behind it, under no circumstances will we condone illegal behaviour.”

BATSA also said it was currently involved in litigation with several manufacturers “who have made claims that some of our activities went beyond our legitimate interest in combating the illicit trade. We are conducting an investigation with the assistance of an external law firm and if we were to find that illegal activity had occurred, we would, of course, take appropriate action. However, given that our investigation is ongoing and that some of the allegations are the subject of legal proceedings, it would not be appropriate for us to comment any further on them.”

BATSA, the statement added, was “continuing to co-operate with law enforcement agencies to address the growing illicit trade issue in Southern Africa”.

Meanwhile an international petition, Make British American Tobacco Pay, by Corporate Accountability International, International Labour Rights Forum, Rainforest Action Network, RootsAction and Watchdog.net, has garnered 48,504 signatures.

The petition begins:

“British American Tobacco has been implicated in conducting illegal activities in Kenya, Uganda, Rwanda, Burundi, and Comoros. A documentary by the BBC revealed that BAT engaged in corporate espionage and bribed politicians and policy-makers in the name of buying political influence and undermining tobacco control policies. We believe global corporations should not be able to act with such impunity and disregard for people’s lives. We are deeply concerned about the devastating health effects of tobacco throughout the supply chain, and we support democracy across Africa. For these reasons, we demand full and public inquiries into BAT’s activities. And we stand with public officials and people in the United Kingdom, Kenya, Uganda, Rwanda, Burundi, Comoros, and the United States to make BAT pay.”

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